EAST VILLAGE — A real estate company is working to sign new restaurant tenants on a formerly derelict East Village alley in hopes of transforming it into a thriving retail strip.

Avalon Bay — which manages the large residential complex on East 1st Street between the Bowery and Second Avenue — has been courting commercial tenants to its ground-floor spaces, including on the sliver of city-owned street called Extra Place behind legendary former rock club CBGB.

The company's director of retail, Stephen Hutto, told Community Board 3's Economic Development Committee Monday night that he is close to inking a deal to bring a new Mediterranean-style restaurant into an 1,800-square-foot space on Extra Place, which runs parallel to the Bowery just east of the thoroughfare off East 1st Street.

A rendering of how the developer wants Extra Place to look in the future.View Full Caption

The developer is also trying to negotiate a lease for another restaurant at the corner of Second Avenue and East 1st Street, which offers nearly 2,200 square feet of space and is being eyed by an unnamed restaurant group that has multiple locations throughout the city and in Las Vegas, Hutto said.

In addition, a popular Brooklyn-based coffee shop has shown interest in moving into the 600-square-foot space on East 1st Street near the corner of Extra Place, though negotiations are currently in the preliminary stage.

While Hutto did not name any of the prospective tenants, citing the fact that no deals had been finalized, he did hint that the Mediterranean restaurant may come courtesy of the operators behind a popular organic noodle joint nearby.

"Our goal is to generate foot traffic for these folks to be successful," he said, noting the need for a mix of retail operations.

Avalon Bay currently leases to such tony tenants as Daniel Boulud's DBGB, upscale clothiers Blue & Cream and Misha Nicole, and the forthcoming incarnation of longtime East Village restaurant Veselka.

Epicurean Management Co., which runs the critically acclaimed West Village restaurants Dell'anima and L'Artusi, also recently announced plans to take over the Bowery Wine Company on East 1st Street and combine it with two adjacent spaces for a barnd-new new venture.

Hutto wanted to get the board's blessing for future tenants to seek new liquor licenses — something the committee said would need to occur on a case-by-case basis — but he also asked members to offer their own suggestions for how to populate the storefronts.

The developer has considered businesses ranging from a high-end furniture store and salon to a shoe store and gelato-maker, but Hutto said the need for "anchor" tenants like restaurants has driven Avalon Bay's search.

Some community board members cited the lack of retail diversity in the neighborhood, as bars and restaurants continue to swallow up area storefronts, recommending that Avalon Bay incentivize tenancy for a wide range of businesses by setting their rents below market rates.

"We're not trying to get every nickel," Hutto responded, noting that a strong mix of retail would help all the businesses succeed in the in the long run.

The company also plans to spruce up the currently unremarkable stretch of Extra Place with sidewalk seating, planters, lighting, outdoor signage and awnings that will help distinguish businesses and bring more traffic to the block.

Avalon Bay is also reaching out to local arts organizations to bring creative programming to the strip, which could host functions like festivals in the future, Hutto added.

DNAinfo is New York's leading neighborhood news source. We deliver up-to-the-minute reports on entertainment, education, politics, crime, sports, and dining. Our award-winning journalists find the stories - big or small - that matter most to New Yorkers.